Burford Capital Regulatory News (BUR)

Key activity2

•

2Q23 realized gains tripled to $59 million, up 254% from $17 million in 2Q22

o 

1H23 realized gains of $94 million, up 255% from $27 million in 1H22

•

2Q23 realizations of $133 million, up 167% from $50 million in 2Q22

o 

1H23 realizations of $195 million, up 178% from $70 million in 1H22, reflecting increased portfolio velocity, as the case backlog in the courts continues to clear

•

2Q23 cash receipts3 of $150 million, up 266% from $41 million in 2Q22

o 

1H23 cash receipts3 of $247 million, up 148% from $99 million in 1H22, primarily driven by realizations including three matters that generated aggregate proceeds of $147 million

•

2Q23 deployments of $181 million, up 159% from $70 million in 2Q22

o 

1H23 deployments of $248 million, up 103% from $122 million in 1H22, reflecting in part the balance sheet's greater participation in new capital provision-direct assets

2 Represents Burford-only capital provision-direct assets

3 Represents Burford-only proceeds from capital provision-direct, capital provision-indirect and asset management

Financial results4

•

Total revenues in 1H23 of $382 million, up 214% from $122 million in 1H22, driven by higher capital provision income due to positive momentum in the progression of our portfolio

o 

In 2Q23, while realized gains were up sharply, total revenues were $43 million (2Q22: $15 million), reflecting the impact of increased discount rates on our revised valuation methodology

•

Operating income in 1H23 of $284 million, up 332% from $66 million in 1H22; operating income in 2Q23 was essentially at breakeven, primarily reflecting increased operating expenses

o 

Increase in operating expenses in 2Q23 driven primarily by an increase in compensation expenses and general, administrative and other expenses compared to 2Q22

o 

All but $1.2 million of the increase in compensation and benefits in 2Q23 compared to 2Q22 was non-cash, driven principally by accruals as a result of increases in Burford's share price and asset values

o 

Increase in general, administrative and other expenses in 2Q23 compared to 2Q22 includes $3.3 million in audit, professional and corporate legal fees due to the development of the revised fair value methodology and build-out of quarterly reporting

•

Net income attributable to Burford Capital Limited shareholders of $238 million in 1H23 (1H22: $7 million), with net income per ordinary and diluted share of $1.09 and $1.07, respectively (1H22: $0.03 each)

o 

Net loss attributable to Burford Capital Limited shareholders of $22 million in 2Q23 (2Q22: net loss of $49 million), with net loss per ordinary and diluted share of $0.10 each (2Q22: net loss per ordinary and diluted share of $0.23 each)

•

Tangible book value attributable to Burford Capital Limited per ordinary share of $8.26 at June 30, 2023, up 12% from $7.36 at December 31, 2022

4 Represents Burford-only

Portfolio

•

Group-wide portfolio grew to $7.0 billion at June 30, 2023 (December 31, 2022: $6.1 billion), due to significant fair value gains and growth in deployments and undrawn commitments

o 

Group-wide new commitments of $557 million in 2Q23 (2Q22: $363 million) and $722 million in 1H23 (1H22: $445 million)

•

Consolidated fair value of capital provision assets increased 18% to $4.4 billion at June 30, 2023 from $3.7 billion at December 31, 2022

o 

Of the $672 million increase in capital provision asset value in 1H23, $280 million attributable to the YPF-related assets

•

Fair value of Burford-only capital provision assets increased 16% to $3.1 billion at June 30, 2023 from $2.6 billion at December 31, 2022

o 

Of the $423 million increase in capital provision asset value in 1H23, $185 million attributable to the YPF-related assets

•

On September 8, 2023, the court rendered a decision in the YPF-related assets holding that the appropriate date for the tender offer was April 16, 2012 and that pre-judgment interest should run from May 3, 2012 at a simple interest rate of 8%

•

Cumulative ROIC since inception from Burford-only capital provision-direct assets steady at 88% (December 31, 2022: 88%) and IRR of 29% (December 31, 2022: 29%)

Liquidity and capital

•

Burford-only cash and cash equivalents and marketable securities of $441 million at June 30, 2023 (December 31, 2022: $210 million)

o 

Strong liquidity position at June 30, 2023 primarily reflects issuance of $400 million in senior notes in June 2023 and increasing Burford-only realizations, partially offset by strong Burford-only deployments

o 

On July 12, 2023, Burford redeemed in full the aggregate outstanding principal amount of the 6.125% bonds due 2024 at a redemption price of par

•

Burford-only due from settlement of capital provision assets decreased 19% to $93 million at June 30, 2023, of which $69 million (74%) was collected in cash at September 7, 2023

•

Total shareholders' equity attributable to Burford Capital Limited was $1,942 million at June 30, 2023 (December 31, 2022: $1,743 million)

o 

Total shareholders' equity attributable to Burford Capital Limited per ordinary share of $8.87 at June 30, 2023 (December 31, 2022: $7.97 per ordinary share)

Dividend

•

On September 8, 2023, Burford's board of directors declared an interim dividend of 6.25¢ per ordinary share payable on December 7, 2023 to shareholders of record on November 10, 2023, with an ex-dividend date of November 9, 2023

Burford Capital Limited

For investor and analyst inquiries:

Robert Bailhache, Head of Investor Relations, EMEA and Asia - email

+44 (0)20 3530 2023

Jim Ballan, Head of Investor Relations, Americas - email

+1 (646) 793 9176

For press inquiries:

David Helfenbein, Vice President, Public Relations - email

+1 (212) 235 6824

Numis Securities Limited - NOMAD and Joint Broker

+44 (0)20 7260 1000

Giles Rolls

Charlie Farquhar

Jefferies International Limited - Joint Broker

+44 (0)20 7029 8000

Graham Davidson

Tony White

Berenberg - Joint Broker

+44 (0)20 3207 7800

Toby Flaux

James Thompson

Three months ended June 30,

Six months ended June 30, 

($ in thousands)

2023

2022

2023

2022

Revenues

Capital provision income

35,667

35,006

511,600

175,745

Plus/(Less): Third-party interests in capital

provision assets

4,813

16,857

(95,532)

218

Asset management income

1,894

2,394

3,891

5,508

Services and other income

2,177

(6,767)

5,497

(10,879)

Total revenues

44,551

47,490

425,456

170,592

Total operating expenses

43,632

26,540

97,931

56,827

Operating income

919

20,950

327,525

113,765

Finance costs and loss on debt extinguishment

21,124

21,636

41,677

37,477

Foreign currency transactions (gains)/losses

(8,898)

2,544

(11,338)

3,058

(Loss)/income before income taxes

(11,307)

(3,230)

297,186

73,230

(Provision) for income taxes

(8,969)

(14,942)

(16,081)

(18,366)

Net income

(20,276)

(18,172)

281,105

54,864

Net income attributable to Burford Capital

Limited shareholders

(21,540)

(49,352)

237,885

6,928

Net income attributable to Burford Capital

Limited shareholders per ordinary share

Basic

$ (0.10)

$ (0.23)

$ 1.09

$ 0.03

Diluted

$ (0.10)

$ (0.23)

$ 1.07

$ 0.03

Three months ended June 30,

Six months ended June 30, 

($ in thousands)

2023

2022

2023

2022

Revenues

Capital provision income

35,392

(4,810)

351,407

95,777

Asset management income

5,684

25,829

25,041

36,763

Services and other income

2,161

(5,641)

5,466

(10,885)

Total revenues

43,237

15,378

381,914

121,655

Operating income

(330)

(10,660)

284,338

65,826

Net income

(21,540)

(49,352)

237,885

65,826

Net income per share:

Basic

$ (0.10)

$ (0.23)

$ 1.09

$ 0.03

Diluted

$ (0.10)

$ (0.23)

$ 1.07

$ 0.03

Three months ended June 30, 2023

(GAAP)

(Non-GAAP)

Elimination of third-party interests

($ in thousands)

Consolidated

Strategic Value Fund

BOF-C

Colorado

Advantage Fund

Other

Burford-only

Capital provision income

35,667

(100)

72

4,728

(4,983)

8

35,392

Plus/(Less): Third-party interests in capital provision assets

4,813

-

-

(4,753)

-

(60)

-

Asset management income

1,894

46

3,744

-

-

-

5,684

Services and other income

2,177

-

(1)

-

-

(15)

2,161

Total revenues

44,551

(54)

3,815

(25)

(4,983)

(67)

43,237

Operating income

919

87

3,628

-

(4,903)

(61)

(330)

Net income/(loss)

(20,276)

87

3,628

-

(4,903)

(76)

(21,540)

Three months ended June 30, 2022

(GAAP)

(Non-GAAP)

Elimination of third-party interests

($ in thousands)

Consolidated

Strategic Value Fund

BOF-C

Colorado

Advantage Fund

Other

Burford-only

Capital provision income

35,006

(1,769)

(55,580)

16,423

48

1,062

(4,810)

Plus/(Less): Third-party interests in capital provision assets

16,857

-

-

(16,435)

-

(422)

-

Asset management income

2,394

57

23,378

-

-

-

25,829

Services and other income

(6,767)

1,132

-

-

-

(6)

(5,641)

Total revenues

47,490

(580)

(32,202)

(12)

48

634

15,378

Operating income

20,950

(245)

(32,240)

-

138

737

(10,660)

Net income/(loss)

(18,172)

(245)

(32,240)

-

138

1,167

(49,352)

Six months ended June 30, 2023

(GAAP)

(Non-GAAP)

Elimination of third-party interests

($ in thousands)

Consolidated

Strategic Value Fund

BOF-C

Colorado

Advantage Fund

Other

Burford-only

Capital provision income

511,600

(207)

(48,236)

(95,041)

(12,005)

(4,704)

351,407

Plus/(Less): Third-party interests in capital provision assets

(95,532)

-

-

95,011

-

521

-

Asset management income

3,891

92

21,058

-

-

-

25,041

Services and other income

5,497

-

(2)

-

-

(29)

5,466

Total revenues

425,456

(115)

(27,180)

(30)

(12,005)

(4,212)

381,914

Operating income

327,525

181

(27,397)

-

(11,802)

(4,169)

284,338

Net income/(loss)

281,105

181

(27,397)

-

(11,802)

(4,202)

237,885

Six months ended June 30, 2022

(GAAP)

(Non-GAAP)

Elimination of third-party interests

($ in thousands)

Consolidated

Strategic Value Fund

BOF-C

Colorado

Advantage Fund

Other

Burford-only

Capital provision income

175,745

(2,277)

(74,175)

498

(318)

(3,696)

95,777

Plus/(Less): Third-party interests in capital provision assets

218

-

-

(510)

-

292

-

Asset management income

5,508

218

31,037

-

-

-

36,763

Services and other income

(10,879)

-

-

-

-

(6)

(10,885)

Total revenues

170,592

(2,059)

(43,138)

(12)

(318)

(3,410)

121,655

Operating income

113,765

(1,357)

(43,200)

-

(77)

(3,305)

65,826

Net income/(loss)

54,864

(1,357)

(43,200)

-

(77)

(3,302)

6,928

For the six months ended June 30,

($ in thousands)

2023

2022

Capital provision income

511,600

175,745

Less: Capital provision income from YPF-related assets

(277,318)

(1,440)

Capital provision income excluding YPF-related assets

234,282

174,305

At

($ in thousands)

 June 30, 2023

 December 31, 2022

Total assets

5,177,712

 4,288,359

Total liabilities

2,441,646

 1,901,289

Total Burford Capital Limited equity

1,942,025

 1,742,584

Non-controlling interests

794,041

 644,486

Total shareholders' equity

2,736,066

 2,387,070

Basic ordinary shares outstanding

 218,957,218

 218,581,877

Total shareholders' equity attributable to Burford Capital Limited per basic ordinary share

8.87

 7.97

Total shareholders' equity per basic ordinary share

12.50

 10.92

At June 30, 2023

(GAAP)

(Non-GAAP)

Elimination of third-party interests

($ in thousands)

Consolidated

Strategic Value Fund

BOF-C

Colorado

Advantage Fund

Other

Burford-only

Total assets

5,177,712

(2,518)

(556,238)

(504,275)

(178,766)

(73,413)

3,862,502

Total liabilities

2,441,646

(141)

(4,234)

(504,275)

(75)

(12,444)

1,920,477

Total shareholders' equity

2,736,066

(2,377)

(552,004)

-

(178,691)

(60,969)

1,942,025

At December 31, 2022

(GAAP)

(Non-GAAP)

Elimination of third-party interests

($ in thousands)

Consolidated

Strategic Value Fund

BOF-C

Colorado

Advantage Fund

Other

Burford-only

Total assets

4,288,359

(2,779)

(477,590)

(409,249)

(103,523)

(76,792)

3,218,426

Total liabilities

1,901,289

(228)

(4,234)

(409,249)

(120)

(11,616)

1,475,842

Total shareholders' equity

2,387,070

(2,551)

(473,356)

-

(103,403)

(65,176)

1,742,584

Three months ended June 30, 2023

(GAAP)

(Non-GAAP)

($ in thousands)

Consolidated

Eliminations and adjustments

 Burford-only 

Other funds

 BOF-C 

Group-wide

Capital provision-direct

130,520

2,677

133,197

22,986

17,328

173,511

Capital provision-indirect

27,064

(22,605)

4,459

22,290

-

26,749

Post-settlement

-

-

-

79,576

-

79,576

Total realizations

157,584

(19,928)

137,656

124,852

17,328

279,836

Three months ended June 30, 2022

(GAAP)

(Non-GAAP)

($ in thousands)

Consolidated

Eliminations and adjustments

 Burford-only 

Other funds

 BOF-C 

Group-wide

Capital provision-direct

54,769

(4,919)

49,850

14,043

9,069

72,962

Capital provision-indirect

7,114

(1,792)

5,322

13,326

-

18,648

Post-settlement

-

-

-

8,840

-

8,840

Total realizations

61,883

(6,711)

55,172

36,209

9,069

100,450

Six months ended June 30, 2023

(GAAP)

(Non-GAAP)

($ in thousands)

Consolidated

Eliminations and adjustments

 Burford-only 

Other funds

 BOF-C 

Group-wide

Capital provision-direct

246,252

(51,309)

194,943

73,376

52,751

321,070

Capital provision-indirect

39,644

(33,089)

6,555

32,774

-

39,329

Post-settlement

-

-

-

98,256

-

98,256

Total realizations

285,896

(84,398)

201,498

204,406

52,751

458,655

Six months ended June 30, 2022

(GAAP)

(Non-GAAP)

($ in thousands)

Consolidated

Eliminations and adjustments

 Burford-only 

Other funds

 BOF-C 

Group-wide

Capital provision-direct

75,980

(5,778)

70,202

24,381

12,319

106,902

Capital provision-indirect

12,466

(6,367)

6,099

17,901

-

24,000

Post-settlement

-

-

-

38,303

-

38,303

Total realizations

88,446

(12,145)

76,301

80,585

12,319

169,205

Three months ended June 30, 2023

(GAAP)

(Non-GAAP)

($ in thousands)

Consolidated

Eliminations and adjustments

 Burford-only 

Other funds

 BOF-C 

Group-wide

Capital provision-direct

246,840

(65,387)

181,453

6,070

58,504

246,027

Capital provision-indirect

78,794

(65,662)

13,132

65,662

-

78,794

Post-settlement

-

-

-

31,939

-

31,939

Total deployments

325,634

(131,049)

194,585

103,671

58,504

356,760

Three months ended June 30, 2022

(GAAP)

(Non-GAAP)

($ in thousands)

Consolidated

Eliminations and adjustments

 Burford-only 

Other funds

 BOF-C 

Group-wide

Capital provision-direct

92,445

(22,273)

70,172

8,926

21,291

100,389

Capital provision-indirect

5,429

(3,518)

1,911

3,518

-

5,429

Post-settlement

-

-

-

26,116

-

26,116

Total deployments

97,874

(25,791)

72,083

38,560

21,291

131,934

Six months ended June 30, 2023

(GAAP)

(Non-GAAP)

($ in thousands)

Consolidated

Eliminations and adjustments

 Burford-only 

Other funds

 BOF-C 

Group-wide

Capital provision-direct

331,525

(83,079)

248,446

12,983

75,956

337,385

Capital provision-indirect

112,794

(93,995)

18,799

93,995

-

112,794

Post-settlement

-

-

-

35,806

-

35,806

Total deployments

444,319

(177,074)

267,245

142,784

75,956

485,985

Six months ended June 30, 2022

(GAAP)

(Non-GAAP)

($ in thousands)

Consolidated

Eliminations and adjustments

 Burford-only 

Other funds

 BOF-C 

Group-wide

Capital provision-direct

183,566

(61,436)

122,130

14,667

60,304

197,101

Capital provision-indirect

20,176

(16,776)

3,400

16,776

-

20,176

Post-settlement

-

-

-

43,152

-

43,152

Total deployments

203,742

(78,212)

125,530

74,595

60,304

260,429

($ in thousands)

Six months ended June 30, 2023

Three months ended March 31, 2023

Three months ended June 30, 2023

Consolidated proceeds from capital provision assets

308,007

144,485

163,522

Less: Elimination of third-party interests

(87,513)

(60,563)

(26,950)

Burford-only total proceeds from capital provision assets

220,494

83,922

136,572

Burford-only proceeds from capital provision-direct assets

213,321

77,742

135,579

Burford-only proceeds from capital provision-indirect assets

7,173

6,180

993

Burford-only total proceeds from capital provision assets

220,494

83,922

136,572

Consolidated asset management income

3,891

1,997

1,894

Plus: Eliminated income from funds

21,150

17,360

3,790

Burford-only asset management income

25,041

19,357

5,684

Less: Non-cash adjustments(1)

(1,728)

(7,086)

5,358

Burford-only proceeds from asset management income

23,313

12,271

11,042

Burford-only proceeds from marketable security interest and dividends

1,563

881

682

Burford-only proceeds from asset recovery fee for services

38

83

(45)

Burford-only proceeds from insurance receipts

1,530

-

1,530

Burford-only proceeds from asset management and other services

26,444

13,235

13,209

Cash receipts

246,938

97,157

149,781

($ in thousands)

Six months ended June 30, 2022

Three months ended March 31, 2022

Three months ended June 30, 2022

Consolidated proceeds from capital provision assets

108,541

69,369

39,172

Less: Elimination of third-party interests

(21,451)

(14,109)

(7,342)

Burford-only total proceeds from capital provision assets

87,090

55,260

31,830

Burford-only proceeds from capital provision-direct assets

81,511

55,163

26,348

Burford-only proceeds from capital provision-indirect assets

5,579

97

5,482

Burford-only total proceeds from capital provision assets

87,090

55,260

31,830

Consolidated asset management income

5,508

3,114

2,394

Plus: Eliminated income from funds

31,255

7,820

23,435

Burford-only asset management income

36,763

10,934

25,829

Less: Non-cash adjustments(1)

(26,547)

(8,725)

(17,822)

Burford-only proceeds from asset management income

10,216

2,209

8,007

Burford-only proceeds from marketable security interest and dividends

967

614

353

Burford-only proceeds from asset recovery fee for services

577

418

159

Burford-only proceeds from insurance receipts

413

-

413

Burford-only proceeds from other corporate

191

-

191

Burford-only proceeds from asset management and other services

12,364

3,241

9,123

Cash receipts

99,454

58,501

40,953

Six months ended June 30, 2023

($ in thousands)

Consolidated

Elimination and adjustments

Burford-only

Aggregate cash receipts - three matters of note

181,514

(34,050)

147,464

($ in thousands)

At June 30, 2023

At December 31, 2022

Consolidated carrying value

4,407,888

3,735,556

Consolidated undrawn commitments

1,983,154

1,720,727

Eliminations of third-party interests:

Less: Attributable to carrying value

(1,348,424)

(1,100,137)

Less: Attributable to undrawn commitments

(471,789)

(413,446)

Burford-only Carrying value

3,059,464

2,635,419

Burford-only undrawn commitments

1,511,365

1,307,281

Burford-only portfolio

4,570,829

3,942,700

Other funds carrying value

1,115,482

1,076,320

Other funds undrawn commitments

265,502

239,145

Other funds portfolio

1,380,984

1,315,465

BOF-C carrying value

597,340

516,982

BOF-C undrawn commitments

434,930

371,724

BOF-C portfolio

1,032,270

888,706

Total group-wide portfolio

6,984,083

6,146,871

At June 30, 2023

At December 31, 2022

(GAAP)

(Non-GAAP)

(GAAP)

(Non-GAAP)

($ in thousands)

Consolidated

Elimination of third-party interests

Burford-only

Consolidated

Elimination of third-party interests

Burford-only

Cash and cash equivalents

365,336

(31,779)

333,557

107,658

(33,979)

73,679

Marketable securities

107,180

-

107,180

136,358

-

136,358

Total cash and cash equivalents and marketable securities

472,516

(31,779)

440,737

244,016

(33,979)

210,037

At June 30, 2023

At December 31, 2022

(GAAP)

(Non-GAAP)

(GAAP)

(Non-GAAP)

($ in thousands)

Consolidated

Elimination of third-party interests

Burford-only

Consolidated

Elimination of third-party interests

Burford-only

YPF-related assets

1,512,062

(504,397)

1,007,665

1,232,549

(409,514)

823,035

Other assets

2,895,826

(844,027)

2,051,799

2,503,007

(689,602)

1,813,405

Capital provision assets

4,407,888

(1,348,424)

3,059,464

3,735,556

(1,099,116)

2,636,440

At June 30, 2023

At December 31, 2022

(GAAP)

(Non-GAAP)

(GAAP)

(Non-GAAP)

($ in thousands)

Consolidated

Elimination of third-party interests

Burford-only

Consolidated

Elimination of third-party interests

Burford-only

Due from settlement of capital provision assets

94,391

(1,754)

92,637

116,582

(1,932)

114,650

Three months ended June 30, 2023

Three months ended June 30, 2022

(GAAP)

(Non-GAAP)

(GAAP)

(Non-GAAP)

($ in thousands)

Consolidated

Eliminations and adjustments

Burford-only

Consolidated

Eliminations and adjustments

Burford-only

Realized gains relative to cost

59,335

(554)

58,781

21,497

(4,908)

16,589

Six months ended June 30, 2023

Six months ended June 30, 2022

(GAAP)

(Non-GAAP)

(GAAP)

(Non-GAAP)

($ in thousands)

Consolidated

Eliminations and adjustments

Burford-only

Consolidated

Eliminations and adjustments

Burford-only

Realized gains relative to cost

127,405

(33,011)

94,394

32,085

(5,484)

26,601

($ in thousands, except share data)

At June 30, 2023

At December 31, 2022

Total Burford Capital Limited equity

1,942,025

 1,742,584

Less: Goodwill

 (133,962)

 (133,912)

Tangible book value attributable to Burford Capital Limited

1,808,063

 1,608,672

Basic ordinary shares outstanding

 218,957,218

 218,581,877

Tangible book value attributable to Burford Capital Limited per ordinary share

8.26

 7.36

($ in thousands, except share data)

At June 30, 2023

At December 31, 2022

Total shareholders' equity

2,653,361

 2,387,070

Less: Non-controlling interests

 (661,083)

 (644,486)

Total Burford Capital Limited equity

1,942,025

 1,742,584

Basic ordinary shares outstanding

 218,957,218

 218,581,877

Shareholders' equity attributable to Burford Capital Limited per ordinary share

8.87

 7.97

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Consolidated refers to assets, liabilities and activities that include those third-party interests, partially owned subsidiaries and special purpose vehicles that we are required to consolidate under US GAAP. At the date of this announcement, the major entities where there is also a third-party partner in, or owner of, those entities include BCIM Strategic Value Master Fund, LP, Burford Opportunity Fund C LP, Burford Advantage Master Fund LP, Colorado Investments Limited ("Colorado") and several other entities in which Burford holds investments where there is also a third-party partner in, or owner of, those entities.

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Burford-only refers to assets, liabilities and activities that pertain only to Burford on a proprietary basis, excluding any third-party interests and the portions of jointly owned entities owned by others.

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Group-wide refers to the totality of assets managed by Burford, including those portions of the private funds owned by third parties and including private funds that are not consolidated within Burford's consolidated financial statements. Group-wide is therefore the sum of Burford-only and non-controlling interests in consolidated and non-consolidated private funds. Group-wide does not include third-party interests in capital provision assets, the economics of which have been sold to those third parties, that do not meet the criteria to be recognized as a sale under US GAAP. This includes the third-party interests in Colorado and other capital provision asset subparticipations.

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Direct, which includes all of our capital provision assets that we have originated directly (i.e., not through participation in a private fund) from our balance sheet. We also include direct (i.e., not through participation in a private fund) complex strategies assets in this category.

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Indirect, which includes our balance sheet's participations in two of our private funds (i.e., BCIM Strategic Value Master Fund, LP and Burford Advantage Master Fund LP).

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Internal rate of return ("IRR") is a discount rate that makes the net present value of a series of cash flows equal to zero and is expressed as a percentage figure. We compute IRR on concluded (including partially concluded) legal finance assets by treating that entire portfolio (or, when noted, a subset thereof) as one undifferentiated pool of capital and measuring actual and, if necessary, estimated inflows and outflows from that pool, allocating costs appropriately. IRRs do not include unrealized gains or losses.

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Return on invested capital ("ROIC") from a concluded asset is the absolute amount of realizations from such asset in excess of the amount of expenditure incurred in funding such asset divided by the amount of expenditure incurred, expressed as a percentage figure. ROIC is a measure of our ability to generate absolute returns on our assets. Some industry participants express returns on a multiple of invested capital ("MOIC") instead of a ROIC basis. MOIC includes the return of capital and, therefore, is 1x higher than ROIC. In other words, 70% ROIC is the same as 1.70x MOIC.

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Commitment is the amount of financing we agree to provide for a legal finance asset. Commitments can be definitive (requiring us to provide funding on a schedule or, more often, when certain expenses are incurred) or discretionary (allowing us to provide funding after reviewing and approving a future matter). Unless otherwise indicated, commitments include deployed cost and undrawn commitments.

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Deployment refers to the funding provided for an asset, which adds to our deployed cost in such asset.

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Deployed cost is the amount of funding we have provided for an asset at the applicable point in time.

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Fair value adjustment is the amount of unrealized gain or loss recognized in our consolidated statements of operations in the relevant period and added to or subtracted from, as applicable, the asset or liability value in our consolidated statements of financial position.

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Portfolio includes deployed cost, net unrealized gains or losses and undrawn commitments.

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Realization: A legal finance asset is realized when the asset is concluded (i.e., when litigation risk has been resolved). A realization will result in us receiving cash or, occasionally, non-cash assets or recognizing a due from settlement receivable, reflecting what we are owed on the asset.

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Realized gain / loss reflects the total amount of gain or loss generated by a legal finance asset when it is realized, calculated as realized proceeds less deployed cost, without regard for any previously recognized fair value adjustment.

•

Unrealized gain / loss represents the fair value of our legal finance assets over or under their funded cost, as determined in accordance with the requirements of the applicable US GAAP standards, for the relevant financial reporting period (consolidated statement of operations) or cumulatively (consolidated statement of financial position).

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YPF-related assets refers to our Petersen and Eton Park legal finance assets, which are two claims relating to Republic of Argentina's nationalization of YPF S.A., the Argentine energy company.

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Cash receipts provide a measure of the cash that our capital provision and other assets generate during a given period as well as cash from certain other fees and income. In particular, cash receipts represent the cash generated from capital provision and other assets, including cash proceeds from realized or concluded assets and any related hedging assets, and cash received from asset management income, services and/or other income, before any deployments into funding existing or new assets. Cash receipts are a non-GAAP financial measure and should not be considered in isolation from, as a substitute for, or superior to, financial measures calculated in accordance with US GAAP. The most directly comparable measure calculated in accordance with US GAAP is proceeds from capital provision assets as set forth in our consolidated statements of cash flows. We believe that cash receipts are an important measure of our operating and financial performance and are useful to management and investors when assessing the performance of our Burford-only capital provision assets.

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Tangible book value attributable to Burford Capital Limited is calculated by subtracting intangible assets (such as goodwill) from total Burford Capital Limited equity. Tangible book value attributable to Burford Capital Limited per ordinary share is calculated by dividing tangible book value attributable to Burford Capital Limited by the total number of outstanding ordinary shares. Each of tangible book value attributable to Burford Capital Limited and tangible book value attributable to Burford Capital Limited per ordinary share is a non-GAAP financial measure and should not be considered in isolation from, as a substitute for, or superior to, financial measures calculated in accordance with US GAAP. The most directly comparable measure calculated in accordance with US GAAP is total Burford Capital Limited equity as set forth in our consolidated statements of financial position. We believe that tangible book value attributable to Burford Capital Limited per ordinary share is an important measure of our financial condition and is useful to management and investors when assessing capital adequacy and our ability to generate earnings on tangible equity invested by our shareholders.